The E.U.’s tax haven ‘black list’ is notable for those left off

This is the list: Bahrain, Barbados, Grenada, Guan, South Korea, Macau, Marshall, Mongolia, Namibia, Palau, Panama, Saint Lucia, the two Samoa, Trinidad and Tobago, Tunisia, and the United Arab Emirates.

It is the list of 17 tax havens identified by the E.U. (meaning the member states, meeting as part of the “Code of Conduct Group,” not the E.U. Commission).

It is the first time such a list has been made, a first step after the LuxLeaks and Panama Papers scandals.

Brussels has compiled two other lists: a “gray” list, with 47 countries (from Morocco to Cape Verde), and a “hurricane” list containing eight countries, all islands that were recently struck by natural phenomena, which appear very suspicious but whose situation will be reviewed next February (Anguilla, Antigua, Barbados, the Bahamas, Dominica, the U.S. and British Virgin Islands, and Turks and Caicos).

There is no trace of the countries most usually referred to as “tax havens” or semi-tax havens, from Switzerland to Hong Kong, on the list, and Qatar has mysteriously disappeared in the last revision.

And, of course, there no trace of any E.U. country — Ireland, the Netherlands, Luxembourg, Malta, Cyprus — whose tax authorities are very understanding toward tax evasion or tax avoidance.

But the E.U. has a ready answer to that: All E.U. countries are obliged to comply with E.U.-wide legislation on combating tax fraud. However, in the E.U., tax matters are subject to a unanimity vote (and not a majority vote, even a qualified one), so the weapon of the veto is always available to block any step forward.

For Attac, the list is “a parody” and “a political scandal.” The Oxfam NGO sees it as a list compiled under “political influence,” which only days ago had 29 countries, while at least 35 would have fit the criteria used by the E.U. experts.

The “Code of Conduct Group” examined the situation of 92 countries to get to the blacklist of 17. But Russia, for example, has not been examined. To avoid being put on the lists, black or gray, a country must satisfy three requirements: It must accept the automatic exchange of data developed by the OECD, avoid favoring offshore companies and commit to accepting the anti-tax-evasion directives drawn up by the OECD until the end of the year.

Incidentally, the OECD put only one state on its own blacklist: Trinidad and Tobago. The countries that most profit from tax evasion — the Bahamas, the Caymans, and Jersey and Guernsey (protected by Great Britain) — were absent from the list.

For Switzerland and Hong Kong, the E.U. is suggesting they should end their harmful tax practices as soon as possible, but does not specify what these are. And the U.S. is rejecting the OECD’s proposal for the automatic exchange of data.

“The finance ministers of the E.U. have finally adopted the first E.U. list of tax havens,” said Pierre Moscovici, the European Commissioner for Economic Affairs, “an important milestone” for him after “two years of battle.” But Moscovici admits that the list has for the most part just the merit of “its very existence,” it is “insufficient” and “the fight must continue.” The Commissioner added that we should take the list for what it is: a first step, and then apply pressure on member states and third countries.

The blacklist will not be followed by any sanctions.

The E.U. countries are split on this front, and there was no majority to agree on common sanctions applicable to all E.U. member states for the tax havens: France, Germany and Italy were for, but the bloc led by Great Britain, the Netherlands, Ireland, Finland, Sweden, Greece, Malta and Luxembourg, who believe that the “moral” sanction of being on the blacklist is more than enough, won out.

Now, the countries on the list have up to six months to come into compliance.